FIN · T13
Can the AI trade survive a 10-year Treasury above 5% and an oil shock at the same time?
From February 27 to October 8, 2026, the 10-year Treasury yield rose 125 basis points, 115 of them real yield, while breakeven inflation rose 10, by DeepStack's reading of FRED. Retail diesel set a record in the week of September 21, 71% above the week of February 23, by the EIA's survey. The oil shock reaches the AI trade through the Fed and the real yield.
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The boom pays the rate
Nominal growth, fed by deficits and AI spending, runs faster than the 10-year, so a yield above 5% is the price of the boom, not its end.
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The two shocks compound
Diesel leaks into core prices, the Fed hikes into it, and AI borrowing bids up the long end until stocks give way.
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The questions
Settles Dec 31open
Will the 10-year Treasury yield hit 5.50% or higher at any point from October 16 to December 31, 2026?
Settles Jan 12open
Will the EIA say Brent crude averaged above $105 a barrel in the fourth quarter of 2026?
Settles Apr 1open
Will long-run inflation expectations average above 2.60% in March 2027?
Settles Mar 31open
Will the federal employees' S&P 500 retirement fund fall 10% or more from its own peak between October 16, 2026 and March 31, 2027?